Steve Barclay, chief secretary to the Treasury, said the deferral of changes to off-payroll working rules would help businesses and individuals left struggling by the Covid-19 outbreak.
The rules, called IR35 and first implemented in 2000, aim to stop employees registering themselves as freelance contractors in order to pay less tax.
To improve compliance, the government in 2017 made public sector organisations responsible for determining employment status.
That same responsibility was to be extended to every medium and large private sector business in the UK from early next month.
The government have however announced it is postponing the reforms to the off payroll working rules, IR35, from April 2020 to April 6, 2021 to help businesses and individual’s during the ongoing spread of Covid-19.